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Adjudication: shaken but not stirred

Unless you have been hiding under a rock during the winter, you will likely have been aware of Eurocom Ltd v Siemens plc [2014] EWHC 3710 (TCC) in which it was held that Eurocom’s representatives had misrepresented that certain individuals would have a conflict of interest if appointed as adjudicators. Following this decision, it was still generally felt that the practice of stating on your nomination form which individuals you did not want appointed would be permissible provided that this was not represented as a conflict when there was none. However, a case in the TCC last week has now made this position uncertain (with the inherent risk that any party adopting it could end up with an unenforceable decision (or worse)).

In CSK Electrical Contractors Ltd v Kingwood Electrical Services Ltd [2015] EWHC 667 (TCC), Kingwood sought to defend enforcement proceedings on a number of grounds, including alleging that the adjudicator’s appointment was invalid. Relying upon Eurocom, Kingwood alleged that the inclusion in the covering letter to the application to CEDR by CSK of a statement that: "It is preferred that any of the adjudicators in the attached list are not appointed” amounted to a Eurocom situation, which ought to invalidate the appointments (thereby rendering the decisions unenforceable). In fact, no list of preferred adjudicators was attached to the letter and CSK explained that this sentence was simply included in error. On the basis that no “preferred” adjudicators were put forward, the court declined to decide whether enclosing a list of preferences would amount to a Eurocom misrepresentation and/or invalidate an appointment. However, in an obiter remark, the court added that “there may be circumstances in which a stated preference could amount to a misrepresentation”, although the court recognised “that this would never be very straightforward.” No indication was given as to what these“circumstances” may be and it is difficult to see how stating a preference would amount to a misrepresentation.

While this case does not create any new law, it is interesting for practitioners to see how the court is likely to approach Eurocom and also that it acknowledges that Eurocom has: “shaken public confidence in the adjudication process.” What is clear, however, is that the safest course of action is not to state which adjudicators you would prefer not to be appointed. It is also likely that we will see a growing number of requests for copies of the applications by responding parties and perhaps further litigation in respect of these issues, as parties continue to seek novel ways of resisting enforcement.

Compare jurisdictions: Arbitration

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